Muskego finance committee gets clean 2024 audit but seeks detailed Hillandale ARPA ledger

Wendy Unger, a partner with Baker Tilly, told the Muskego City Finance Committee on Aug. 26 that the firm issued a “clean, unmodified opinion” on the city’s 2024 audited financial statements but identified a material weakness related to a year-end journal entry.

The committee voted 2-1 to direct the finance director to provide the council a detailed, line-by-line ledger and supporting account numbers for the Hillandale Road project and the final report submitted for the American Rescue Plan Act (ARPA) funding; the council may request additional auditor work afterward.

Unger opened the presentation by summarizing Baker Tilly’s scope and materials. “I am very happy to say that the audit results, the opinion that we've issued is a clean, unmodified opinion,” she told the committee, calling that “the highest level of assurance” her firm issues. She said Baker Tilly also prepared the audited financial statements and a separate reporting-and-insights document that lists recommendations and any material weaknesses.

Unger said the audit uncovered a single material journal entry that required correction during the audit and that the reporting document flagged segregation-of-duties issues in the finance function tied to 2024 staff turnover. She recommended improved documentation of journal-entry review and approval and regular reconciliations. She also noted upcoming Governmental Accounting Standards Board (GASB) standards to monitor.

On specifics of the material adjustment, Unger said the correction was a transfer of ARPA funds from the ARPA fund into the water utility fund that had not been posted at year end: the money “was still sitting in the ARPA fund. It needed to get out of ARPA because that fund had to close,” she said, adding that the amount was moved into the water fund where it had been spent.

Unger reviewed high-level financial results: the general fund finished 2024 with an approximate $1,069,000 increase to fund balance and unassigned fund balance roughly $9.2 million, above the city policy target of 17% (about $3.5 million). She said no new long-term debt was issued in 2024 and the city paid down about $2.7 million of general obligation principal; long-term general obligation debt was about $29.1 million at year-end. She noted the sewer and water utilities both saw small decreases in cash positions (sewer about $13.9 million; water about $3.4 million) and that the ARPA fund had been spent down in 2024 for the Hillandale project.

During discussion, Alderman Schrader asked the auditor for follow-up documentation on the Hillandale project. “I’m requesting an updated spreadsheet of the summary of the Hillandale Road project in the exact same format we have it that I’m giving to you right there. Detailed ledger of the transactions with the account numbers and a final report that was submitted to the government entity that provided the ARPA funds,” Schrader said.

Committee members debated whether the auditor should prepare the detailed spreadsheet or whether the finance director should prepare it and the auditor merely review. Unger said she has audited the financial statements and could review a spreadsheet but that producing the requested, formatted summary would take additional time and could carry a fee. She estimated a not-to-exceed fee of roughly $1,000–$2,000 for the additional review or roughly $2,000 for roughly three hours of time to appear in person and discuss the work.

A motion to have the auditor return specifically to present the Hillandale detail died for lack of a second. A later motion — to have the finance director provide all line items and supporting ledger detail to council for review before the next common council meeting, with no immediate auditor work requested — passed 2-1. Committee members agreed that if questions remained after the finance director provides the documents, they could ask Baker Tilly to perform additional review or attend a council meeting.

Other routine items on the committee agenda were approved without extended discussion, including a resolution recommending the city be declared eligible for exemption from the county library tax levy, several voucher approvals and payroll wire transfers.

Votes at a glance

- Approval of minutes (Aug. 12, 2025): motion moved and passed (vote not specified in transcript). - Motion requiring finance director to provide Hillandale project line-item ledger and ARPA final report to council for review prior to next common council meeting: passed 2-1. Notes: the committee discussed but did not immediately authorize auditor work; the auditor estimated a $1,000–$2,000 fee for additional review if requested. - Resolution recommending eligibility for exemption from county library tax levy (2026): recommended approved (vote not specified). - Utility vouchers: $102,230.64 — approved (vote not specified). - Tax vouchers: $3,735.68 — approved (vote not specified). - General fund vouchers: $633,073.84 — approved (vote not specified). - Wire transfers for payroll: $460,173.21 — approved (vote not specified).

Next steps and context

The finance director (referred to in the meeting as Jenny or Jennie) was directed to compile and distribute the Hillandale project ledger, account numbers and the final ARPA report to the council for review. Baker Tilly offered to attend the Sept. 9 meeting to answer questions if requested, but indicated additional work to assemble or audit the requested formatted summary could carry a modest fee. Committee members said they preferred to receive the internal finance documents first and return to the auditor only if unresolved questions remained.

The audit’s material-correction note and the committee’s request for the Hillandale detail underline council interest in transparency for ARPA spending and year-end accounting adjustments; the auditor’s “clean, unmodified opinion” indicates Baker Tilly found the city’s audited financial statements materially accurate after the correcting entry was posted.